BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 469
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          SENATE THIRD READING
          SB 469 (Vargas)
          As Amended  May 10, 2011
          Majority vote 

           SENATE VOTE  :21-14  
           
           LOCAL GOVERNMENT    5-3         APPROPRIATIONS      12-5        
           
           ----------------------------------------------------------------- 
          |Ayes:|Skinner, Bradford,        |Ayes:|Fuentes, Blumenfield,     |
          |     |Campos, Davis, Hueso      |     |Bradford, Charles         |
          |     |                          |     |Calderon, Campos, Davis,  |
          |     |                          |     |Gatto, Hall, Hill, Lara,  |
          |     |                          |     |Mitchell, Solorio         |
          |     |                          |     |                          |
          |-----+--------------------------+-----+--------------------------|
          |Nays:|Smyth, Knight, Norby      |Nays:|Harkey, Donnelly,         |
          |     |                          |     |Nielsen, Norby, Wagner    |
          |     |                          |     |                          |
           ----------------------------------------------------------------- 
           SUMMARY :  Requires a city or county to prepare economic impact 
          reports before it approves or disapproves the construction or 
          conversion of superstore retailers.  Specifically,  this bill  :   

          1)Requires a city, county, or city and county (city or county) 
            to prepare an economic impact report prior to approving or 
            disapproving a permit for the construction or conversion of a 
            superstore retailer.

          2)Defines "superstore" as a business establishment that exceeds 
            90,000 square feet of gross floor area, sells a wide range of 
            consumer goods, and devotes 10% of the sales floor area to the 
            sale of items that are exempted from the Sales and Use Tax 
            Law.

          3)Specifies that the term "superstore" shall include retail 
            establishments with multiple tenants under the same roof.

          4)Specifies that the term "superstore" excludes discount 
            warehouses and discount retail stores that sell more than half 
            of their items in large quantities or bulk, and also requires 
            shoppers to pay a membership or assessment fee.









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          5)Utilizes an existing statutory definition of "market area" 
            which states that an area that is recognized in the trade 
            literature as large enough to support a specific big box 
            retailer, but is no more than 25 miles from another big box 
            retailer.

          6)Authorizes a city or county to prepare the economic impact 
            report themselves or contract with a private entity, other 
            than the permit applicant, or with another public agency for 
            the preparation of the report. 

          7)Requires the applicant for the development project to pay for 
            the costs of preparing the economic impact report.

          8)Requires the economic impact report include all of the 
            following:

             a)   An assessment of the extent to which the proposed 
               superstore retailer will capture a share of retail sales in 
               the market area;

             b)   An assessment of how the construction and operation of 
               the proposed superstore will affect the supply and demand 
               for retail space in the market area; and,

             c)   An assessment of how the construction and operation of 
               the proposed superstore will affect employment in the 
               market area, including all of the following:

               i)     The number of persons employed in existing retail 
                 stores in the market area;

               ii)    An estimate of the number of people who will likely 
                 be employed by the proposed superstore;

               iii)   An analysis of whether the proposed superstore will 
                 result in a net increase or decrease in employment in the 
                 market area; 

               iv)    The effect on wages and benefits of employees of 
                 other retail businesses, and community income levels in 
                 the market area;

               v)     A projection of the costs of public services and 








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                 public facilities resulting from the construction and 
                 operation of the proposed superstore retailer and the 
                 incidence of those costs;

               vi)    A projection of the public revenues resulting from 
                 the construction and operation of the proposed superstore 
                 retailer and the incidence of those revenues;

               vii)   An assessment of the effect that the construction 
                 and operation of the proposed superstore retailer will 
                 have on retail operations, including grocery or retail 
                 shopping centers, in the same market area;

               viii)  An assessment of the effect that the construction 
                 and operation of the proposed superstore will have on the 
                 ability of the city or county to implement the goals 
                 contained in its general plan;

               ix)    An assessment of the effect that the construction 
                 and operation of the proposed superstore will have on 
                 average total vehicle miles traveled by retail customers 
                 in the same market area;

               x)     An assessment of the potential for long-term vacancy 
                 of the property on which the superstore is proposed in 
                 the event that the business vacates the premises;

               xi)    An assessment of whether the superstore would 
                 require the demolition of housing or any other action or 
                 change that would result in a decrease or negative impact 
                 on the creation of extremely low, very low-, low-, or 
                 moderate-income housing;

               xii)   An assessment of whether the superstore would result 
                 in the destruction or demolition of park or other green 
                 space, playgrounds, child care facilities, or community 
                 centers;

               xiii)  An assessment of whether the superstore would result 
                 in any other adverse or positive economic impacts or 
                 blight; and,

               xiv)   An assessment of whether any measures are available 
                 that may mitigate any materially adverse economic impacts 








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                 identified by the applicant.

          9)Specifies that nothing in this measure precludes a city or 
            county from conducting additional studies of the effects of 
            the construction and operation of a proposed superstore 
            retailer.

          10)Requires city and county governing bodies to provide the 
            opportunity for public comment on the economic impact reports 
            and their findings at regularly scheduled meetings after the 
            reports' completion but 30 days before issuing any 
            entitlements.

          11)Requires a lead agency, under the California Environmental 
            Quality Act (CEQA), to approve or disapprove a project within 
            180 days from the date of certification of an environmental 
            impact report and approval of an economic impact report, or 
            within 60 days from the date of adoption of a negative 
            declaration and approval of an economic impact report or the 
            determination by the lead agency that the project is exempt 
            from CEQA and approval of an economic impact report.

          12)Makes findings and declarations that the measure applies to 
            charter cities and charter counties because the effects of 
            superstore retailers are a matter of statewide concern that 
            extend beyond local boundaries.

           EXISTING LAW  :

          1)Requires, under the Permit Streamlining Act, each state agency 
            and local agency to compile one or more lists that specify in 
            detail the information that will be required from any 
            applicant for a development project, and requires a public 
            agency that is the lead agency for a development project, or a 
            public agency which is a responsible agency for a development 
            project that has been approved by the lead agency, to approve 
            or disapprove the project within applicable periods of time.

          2)Prohibits a local agency from providing any form of financial 
            assistance to a vehicle dealer or big box retailer, or a 
            business entity that sells or leases land to a vehicle dealer 
            or big box retailer, that is relocating from the territorial 
            jurisdiction of one local agency to the territorial 
            jurisdiction of another local agency but within the same 








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            market area.

          3)Requires, under CEQA, lead agencies with the principal 
            responsibility for carrying out or approving a proposed 
            discretionary project to prepare a negative declaration, 
            mitigated declaration, or environmental impact report (EIR) 
            for this action, unless the project is exempt from CEQA (CEQA 
            includes various statutory exemptions, as well as categorical 
            exemptions in the CEQA guidelines).

          4)Requires each planning agency to prepare and the legislative 
            body of each county and city adopt a comprehensive, long-term 
            general plan for the physical development of the county or 
            city, and of any land outside its boundaries which in the 
            planning agency's judgment bears relation to its planning.

           FISCAL EFFECT  :  According to the Assembly Appropriations 
          Committee, by requiring cities and counties to prepare economic 
          impact reports on superstore projects, this bill creates a new 
          state mandate.  The bill disclaims the state's responsibility 
          for reimbursing local government, citing local officials' 
          ability to charge processing fees that will offset their costs.  
          If the local charges for the new economic impact reports do not 
          exceed the reasonable costs of preparing and using those 
          reports, those charges will be permissible local fees that can 
          be adopted without a vote of the electorate.

           COMMENTS  :  According to the author, this measure "offers the 
          public and local policymakers an opportunity to learn about the 
          potential impacts of a superstore on other retail options in the 
          area, as well as effects on housing, parks, traffic and jobs.  
          The heart of the concept stems from proactive recommendations by 
          a superstore company's (Wal-Mart) representative as a 
          compromise to an ordinance in Los Angeles between an outright 
          ban and no thoughtful oversight."

          The author states that the "goal of this bill is to create 
          financial accountability and the transparency that local 
          communities need to make land use decisions about the impact 
          giant supercenters have on existing businesses, jobs, public 
          services and neighborhoods.  Small and neighborhood businesses 
          are important financial elements to every local economy and 
          function as the backbone to these economies. It's important to 
          inform the public about the consequence that these superstores 








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          pose on small and neighborhood businesses before a superstore 
          developer comes into a community and potentially imposes a risk 
          to the local neighborhoods."

          This bill creates an economic impact report, not entirely 
          dissimilar to the environmental impact report required by CEQA 
          that local governments must prepare before approving or 
          disapproving a development project that includes a superstore 
          retailer.  A superstore retailer is defined as a store greater 
          than 90,000 square feet of gross floor area that sells a wide 
          range of consumer goods, and devotes 10% of the sales floor area 
          to the sale of items that are exempted from the Sales and Use 
          Tax Law.  The project applicant will pay for the report.  This 
          bill creates the framework and sets forth the assessments and 
          projections that must be part of any report, but allows local 
          governments to include any other factors they see fit.  On the 
          other hand, unlike CEQA, it creates no requirement that a local 
          government base or condition its decision to approve or 
          disapprove the project on the results of the economic impact 
          report.  The purpose of the report appears to be to allow local 
          governments to make more informed land use decisions about 
          superstore retailers.

          SB 1056 (Alarcón), which was vetoed by Governor Schwarzenegger 
          in 2004, would have required a city, county, or city and county 
          to prepare an economic impact report prior to approving or 
          disapproving a proposed development project that would permit 
          the construction of a superstore retailer, defined as a store 
          greater than 130,000 square feet of gross buildable area that 
          generates sales or use tax pursuant to the Bradley-Burns Uniform 
          Local Sales and Use Tax that contains more than 20,000 
          stockkeeping units, and derives 10% of its total sales from the 
          sale of non-taxable merchandise.
           
           SB 1523 (Alarcon) of 2006 similarly required an economic impact 
          report to be prepared prior to a city's or county's approval or 
          disapproval of a superstore retailer with greater than 100,000 
          square feet of, and was again vetoed by Governor Schwarzenegger.
           
           Support arguments:  Supporters, including the American 
          Federation of State, County, and Municipal Employees, state that 
          "SB 469 does not limit local control; it empowers local 
          governments to make the best decisions for their own 
          constituents?.There is no down side to increased information and 








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          well-informed decision making." 

          Opposition arguments:  Opponents, including the California 
          Chamber of Commerce, argues that "SB 469 takes away the power of 
          a community to build itself and is a heavy handed mandate on 
          local government."  Opponents also believe that the bill creates 
          another layer of bureaucracy to local governments making it more 
          difficult to bring new jobs.    
           
           
          Analysis Prepared by  :    Katie Kolitsos / L. GOV. / (916) 
          319-3958 


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